The concept of ReDigi is simple. It is supposed to make it possible for you to resell digitally downloaded content (tracks from Beatport, Amazon, iTunes Store, etc.,) by transferring the song to whoever you're selling it to, and making sure you don't have any copies left on your PC. The implementation is impossibe. Sellers could back the tracks up on external storage media, rename or relabel the tracks, or simply sell tracks they never actually bought, to begin with. The courts ruled against ReDigi, digitally-acquired content can't be resold.

A Southern District court of New York struck down ReDigi's appeal against a lawsuit by Capitol Records, alleging copyright infringement. The court observed that first sale principles, which allow people to resell their old physical records, cassettes, and discs, don't apply to digitally-sourced content (that which doesn't ship in physical media). ReDigi may force sellers of pre-owned digital content to delete copies from their PCs, but the process still involves making a copy of the content, without the record label's permission.

It remains to be seen how hard Capitol Records will go on ReDigi, as the court is yet to decide on penalties. The ruling could set a precedent against resale of content. An increasing portion of content consumed is being purchased digitally, be it games on Steam, movies bought from Netflix, or music from iTunes, and not physical media. Publishers are getting to keep their profit margins, even in the "digital millennium."